Cash-Strapped City Fails to Collect $2.1 Billion in Unpaid Fines

Co-op and condo boards in New York City dread getting violations from the Department of Buildings (DOB). There are the monetary fines, for starters. Then there is the cost of correcting the building's defect(s). And finally, there is potential trouble with lenders, from small banks to the mortgage giants Fannie Mae and Freddie Mac, who have recently tightened the screws on lending in buildings that have outstanding violations from the DOB.

Now, as Mayor Eric Adams seeks to slash city spending by 4% — blaming it on the rising cost of handling the influx of immigrants — the city's Independent Budget Office (IBO) reports that the city has failed to collect $2.1 billion in fines over the past six years (2017-2022). The city agency with the biggest pile of unpaid fines is the DOB, at $627 million, followed distantly by the Department of Sanitation, at $77 million.

The report was prepared at the request of City Councilmember Gale Brewer (D-Manhattan), and it is divided into three categories: parking and speeding violations ($1 billion); lienable property charges ($150 million); and penalties adjudicated by the Office of Administrative Trials and Hearings ($940 million), which includes the unpaid DOB fines.

"These three measures are by no means exhaustive," IBO Director Louisa Chafee wrote in a letter to Brewer, "and are likely an undercount of the total amount of debt that the city is owed. Some examples of what is not included here are sales, income, and business taxes, as well as unpaid sewer and water charges."

Failure to collect property taxes could be attributed to the city's decision to pause its controversial tax lien sales program, a powerful tool that had been used to get delinquent property owners to pay their back taxes.The program was instituted by Mayor Rudolph Giuliani. Adams campaigned on a promise to abolish it.

“I know people say, ‘How come others don’t pay their bills? I pay my bills, and it doesn’t seem fair,’” Brewer tells The City. “You see this big number here, $2.1 billion, and I never know how much the city really goes after trying to get these people to pay their bills — or not.”

Bernard O’Brien, one of the authors of the IBO report, adds, “One of the questions now is: Could the city be doing more to collect this money?"